What Is Spatial Index?
The space price index is also known as the "regional price index", which is used to compare the comprehensive difference in the prices of various commodities in different regions or countries. It is an important analytical tool for regional and international comparisons.
Space price index
Right!
- The space price index is also known as the "regional price index", which is used to compare the comprehensive difference in the prices of various commodities in different regions or countries. It is an important analytical tool for regional and international comparisons.
- Compilation of space price index
- Unlike dynamic indexes, the compilation and analysis of spatial indexes have some special requirements.
- Assume price comparison between A and B regions. If B region is used as a comparison benchmark, the Laplace formula is used to compile the price index, and we get:
- The other way round; if we use the A region as the comparison benchmark, and use the Lagrangian formula to compile the price index, we get:
- There is a similar problem with the Pax Price Index. This is very disadvantageous in spatial comparison, because the baseline of spatial comparison is often artificially determined. If the result given by an index formula will change with the change of the reference area, it is not suitable for spatial comparison. Therefore, people often adopt the Edgeworth formula when compiling the space price index:
- The comparison result obtained in this way will not be affected by the change of the comparison benchmark, and the same measurement factors reflect the average commodity structure of the two comparison areas, which has practical economic significance. The index has also been widely used in international economic comparisons. [1]